After an unprecedented global economic downturn, recovery is beginning to take hold across the world. Nevertheless, the downturn has heightened the core challenges that countries faced before the crisis took hold.Among these, one that stands out in the countries of the Middle East and North Africa is youth employment—or a lack of it.

Simply put, the region is facing unparalleled demographic pressures. Population growth over the past two generations has been among the fastest in the world: the region’s work force is projected to reach 185 million in 2020, 80 percent higher than in 2000. And the region is one of the most youthful in the world—with about 60 percent of the population less than 25 years old.

But employment growth has lagged far behind the demands of growing populations, even when the region was experiencing good economic growth. Now with growth rates likely to be more modest after the crisis, the task of generating enough jobs for young men and women is becoming more challenging. Job creation must therefore be a top policy priority going forward.

Softening the impact

Creating meaningful jobs in any economy is difficult and requires action on different fronts. In the Middle East, historically people have looked to the government to provide jobs but increasingly it is clear that a thriving private sector is key to creating meaningful, productive jobs on the required scale. Of course, governments still have a critical role in providing a sound macroeconomic and financial environment in which the private sector will operate, and in ensuring that the educational and training systems in each country provide students with the skills and aptitude they will need to be successful workers in the 21st century.

How can the International Monetary Fund (IMF) help in this regard? Mainly by working closely with the countries of the Middle East and North Africa to help devise policies that provide for macroeconomic stability and spur strong and sustainable economic growth that is essential to creating employment. But the economic challenges of the next generation also require a broader engagement—one that must include the young people who will inevitably be called upon to address these challenges as they enter into business, government, academia, and other walks of life.

Talking with the next generation

With this in mind, the IMF has started to engage with the young people of the region to help define forward-looking solutions. Part of this effort is a Middle East Youth Dialog —a series of roundtable discussions with students from renowned universities across the region. From Morocco to Egypt, and the United Arab Emirates to Pakistan, IMF staff have sat down with the next generation of leaders to discuss the policy measures needed to secure sustainable economic growth that, in turn, will help generate new employment opportunities.

This new initiative includes the establishment of a social networking site where young people of the region are encouraged to transcend their own borders by sharing their questions, concerns, and visions of their economic futures.

On April 4, IMF Managing Director Dominique Strauss-Kahn meets with about 50 students in Amman, Jordan, for a town hall meeting at the culmination of the roundtable discussions. The session is being broadcast live via BBC Arabic on television, radio, and the internet. Beyond this groundbreaking event, additional roundtables are planned for other countries in the region, as well as continued discussions on the social networking site. These first steps take place as countries of the Middle East and North Africa begin to rebuild the momentum of growth to help their citizens fully benefit from the opportunities of the 21st century. And that includes the youth whose future we all will depend on.

3 Responses

I would like to point out the following. The “fact” that youth in
the Arab world prefer to work for the public sector is probably
due tothe fact that the minimum wage, if established by Law, is
set at extremely low levels. In other words, economies in the
region must re-establish the minimum wage in order to
make it more attractive for young locals to join the lablur
market.

We must not forget the fact that the hitherto exisitng female participation rates are low. However, these rates, due to several reasons, are increasing, and this makes the challenge of creating employment opportunities even more serious.

According to the Arab Youth Survey conducted in October 2009 (www.arabyouthsurvey.com), 46% of youth in the countries covered would prefer to work in the government sector, against 43% in favour of the private sector (these figures reach 61% and 31%, respectively in the UAE). This sheds some new light on the question of youth unemployment. On the one hand, public sector is seen as providing stable, secure and high-paying jobs, while it doesn’t necessarily expect high productivity. On the other hand, private sector is much more competitive, mostly due to a large share of expatriates in the countries (especially in GCC, where this share sometimes reaches up to 80%). Young people are deterred from working in the private sector, often seeing those jobs as too demanding or not interesting enough.

At the same time, there is anecdotal evidence suggesting that at least in some countries (such as Saudi Arabia) many employers prefer expatriate workers, often setting recruitment criteria in such a way that Arab nationals are from the start disadvantaged and further discouraged. It’s difficult to blame them, though, if expatriates are usually regarded as more productive and often agree to lower salaries. A significant problem is the lack of willingness among young people to start up their own businesses; sometimes, relatively high costs of failure are cited (it seems, in some countries bankruptcy cases are handled by the criminal court!)

In order to tackle the imbalances on the Arab job market, all above issues need to be addressed. In the end, the youth’s mentality has to change. They need to assume more responsibility for their own professional career and understand it’s not the duty of the government to provide them with a satisfying job, but it’s in their own hands to find it. In order to do it, they need to become more competitive, learn to take some more risks and (for some of them) learn that low-skilled jobs are not a disgrace but also a way to earn for a living (this approach seems to be prevalent among some youth in countries like the UAE or Saudi Arabia). Arab’s qualifications and job skills also will have to adjust to the current requirements on the job market. This is something I believe IMF projects in the region can help with. Tackling the issue of the influx of expatriates (especially those from poorer countries, agreeing to do work for relatively low salaries) will be more difficult, and will require some more painful adjustments from the locals in the long term.